Other big retailers also touch 52-week peaks

Referenced Symbols

CHICAGO (CBS.MW) -- Toys "R" Us peaked at a fresh 52-week high Thursday to cap a near-28 percent run-up in the stock in the last two weeks.

Toys "R" Us
TOY,
+6.64%
shares ended the session up 35 cents, or 2.4 percent, at $14.80 -- a nickel away from its intraday high. The climb comes only days before a bankruptcy court judge determines the fate of upscale competitor FAO Schwarz
FAOOQ,
which filed for Chapter 11 protection shortly before Christmas.

The Toys "R" Us upsurge also comes in the wake of the Jan. 14 bankruptcy filing of rival KB Toys. All three toy stores posted dismal holiday sales as discounts giants such as Wal-Mart and Target used aggressive pricing to lure customers.

Bernard Sands analyst Richard Hastings said hedge funds were driving the gains as managers bought up Toys "R" Us shares at fire-sale prices. They also are speculating that Toys "R" Us will fare better as its competitors trim down or even go out of business.

"They're buying on the dip," Hastings said. "The price-to-earnings ratio was beaten down at $11 and $12 a share. This is not bankruptcy pricing.

"There are certainly issues affecting the long-term market share competition for Toys "R" Us, but that's still so far away," he added. "Pricing at $11 or $12 a share did not reflect any sense of immediate default."

At the finish, the S&P Retail Index
$RLX
rested at 382.64 -- its highest level in two weeks.

May and Dillard's shares made it a two-day streak into new 52-week peaks. May
MAY,
topped $32.51 before easing to $32.41. Dillard's
DDS,
+10.02%
crested at $17.98 and pulled back to close at $17.86. RadioShack
RSH,
+4.46%
touched $33.69 before falling back to $33.27.

Shares of Starbucks
SBUX,
+4.31%
capped at $36.20 a day after the coffee chain reported record sales and earnings to clock a gain of 38 percent in six months. The Seattle-based company beat analysts' expectations with a profit of $110.8 million, or 27 cents a share, 41 percent higher than last year's results. See full story.

On the downside, shares of Kmart
KMRT
took the leading role, losing 75 cents, or 2.5 percent, to $29.50.

Charlotte Russe
CHIC,
+3.05%
recovered much of the more than 5 percent it lost earlier to finish at $13, off 5 cents, after reporting a 13 percent drop in profits for the fiscal first quarter.

Charlotte Russe posted earnings of $6.5 million, or 28 cents a share, compared to $7.4 million, or 32 cents a share, in the year-ago period. Same-store sales declined 7.6 percent, while net sales for the first quarter rose 12 percent to $149.3 million.

No surprises here, said Chief Executive Mark Hoffman. "Last October, we guided investors to expect a promotional holiday season for the young women's fashion sector without the benefit of strong fashion trends to drive the selling of regular-priced goods," he said in the earnings release. "As our financial results show, the first quarter of fiscal 2004 was very much as expected."

He forecast flat to low single-digit percentage decreases in same-store sales in the fiscal second quarter and expects a loss per share of 5 cent to 9 cents.

Elsewhere, J.C. Penney
JCP,
+15.44%
said after the bell that it will eliminate at least 475 jobs as it closes down a telemarketing facility, restructures corporate headquarters and reins in marketing expenses.

The moves are part of a long-term plan to cut $200 million annually in expenses. Penney said it will take a $20 million charge, or 4 cents a share, in the fourth quarter. See full story.

Penney shares ended the session down modestly at $27.26 ahead of the news.

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Jennifer Waters

Jennifer Waters covers everything that impacts consumers for MarketWatch and writes the Consumer Confidential column. She is an award-winning reporter who has covered a wide variety of beats during her more than 10 years with MarketWatch. Waters is a regular contributor to local and national TV and radio stations, including Fox News and Fox Business News, as well as the Wall Street Journal.

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